Ron Paul's Federal Reserve Audit Bill (Passed)

[R_P_A_S]

http://www.huffingtonpost.com/2012/07/25/federal-reserve-audit-bill_n_1702879.html?utm_hp_ref=fb&src=sp&comm_ref=false

The whole "end the fed" business is something I honestly don't really fully understand. I don't know enough to get into the debate... but many people who call them selves "leftist" are wetting their pants over this. I'd like to hear some socialist, commie, anarchist.. etc.. discussion on this.. please.. thank you!

[Ethics Gradient, Traitor For All Ages]

Getting rid of the fed is supposed to be a step on the way toward reintroducing the gold standard and presumably a step toward overthrowing our godless collectivist reptilian overlords.

I don't really see a problem with an audit, it might turn up something interesting. But from a revolutionary position it seems pretty yawn worthy.

[cynicles]

I think this federal reserve crap appeals to young people from my generation because it offer an easy answer. Just get rid of the federal reserve and capitalism will be awesome again! As if the fed we're some aberration to capitalism.

[R_P_A_S]

Getting rid of the fed is supposed to be a step on the way toward reintroducing the gold standard and presumably a step toward overthrowing our godless collectivist reptilian overlords.

I don't really see a problem with an audit, it might turn up something interesting. But from a revolutionary position it seems pretty yawn worthy.

I've heard that "getting back to the gold standard" It's not possible now days. Is this true?

[R_P_A_S]

I think this federal reserve crap appeals to young people from my generation because it offer an easy answer. Just get rid of the federal reserve and capitalism will be awesome again! As if the fed we're some aberration to capitalism.

How would getting rid of the Federal Reserve make "capitalism awesome" again.
???

[Positivist]

How would getting rid of the Federal Reserve make "capitalism awesome" again.
???

Hes not suggesting that it would, hes defining what libertarians believe.

[¿Que?]

I've heard that "getting back to the gold standard" It's not possible now days. Is this true?
Ok, this is really a weak point for me, but the idea is that the gold standard will result in a fixed currency. Right now, the fed can print money, which can lower the value of the dollar, and results in inflation(?), or something. Returning to the gold standard fixes the value of the dollar so the fed can't just print money aside from what is lost due to regular wear an tear of old bills.

The problem with any fixed currency, not just the gold standard, is that, I think, if the price of commodities changes, your dollar won't go as far. Variable currency can adjust so that if prices go up, the value of the dollar can too. That doesn't mean it always does, but it can.

But I wouldn't take what I said to heart, because it's a very weak point in my knowledge, so some of this could be wrong.


How would getting rid of the Federal Reserve make "capitalism awesome" again.
???
Getting rid of the federal reserve would prevent them from printing money and setting interest rates or something along those lines. I think they see it as another regulatory body that needs to be disposed of in order to bring about the glorious anarcho-capitalist voluntarist utopia. I always tell them, yeah, let's get rid of the government and all regulations, sure, but let's expropriate all the private property first, eh?

[¿Que?]

Hes not suggesting that it would, hes defining what libertarians believe.
And I think he's asking what their reasoning is...

[¿Que?]

https://en.wikipedia.org/wiki/Fixed_exchange_rate

An article on fixed exchange rate. Let's all read it, and then grade my performance on the other post :P

[Ethics Gradient, Traitor For All Ages]

I've heard that "getting back to the gold standard" It's not possible now days. Is this true?

Hopefully a comrade with a stronger grasp of economics than me will respond, but it seems awfully unlikely. I would expect that the transition back to gold would go against the material interests of a significant enough portion of the ruling class as to make it politically impossible if nothing else.

[Positivist]

And I think he's asking what their reasoning is...

Yes and in the post it is already explained that it is not based on reasoning as much as it is based on an easy answer.

[cynicles]

How would getting rid of the Federal Reserve make "capitalism awesome" again.
???
Magic Libertarian dust!

*sprinkle*
*cough*
Smells like unregulated industry and tobacco!
*cough*
*cough*

[Ethics Gradient, Traitor For All Ages]

How would getting rid of the Federal Reserve make "capitalism awesome" again.
???

Libertarians believe that among other things, regulation leads to "crony capitalism", but of course in reality that is just the way capitalism normally functions. Their belief is that without regulation the market will do away with various things like unjust monopolies that supposedly only exist due to state intervention.

[¿Que?]

Yes and in the post it is already explained that it is not based on reasoning as much as it is based on an easy answer.
Well, this is not really true then. I mean, sure some libertarians just take everything they hear without critically examining it, but others actually have very elaborate reasoning schemes to justify their position. Just like a lot of lefties don't critically examine their own ideas, and simply regurgitate lefty talking points, or quote Marx as if he were the infallible pope of communism...

[NewLeft]

Gold depletion makes the gold standard unfavourable. If we were to go to a 100% backed by gold dollar, then the government would go bankrupt. Not to mention it would lead to deflation, a low interests rate and higher rate of profit for the capitalists. This means higher unemployment for the workers. The central bank would have to constantly hoard gold.. Even if we did end the fed, which would consequently reduce the amount of inflation caused by the currency entering through the major banks.. This could increase the real wages of workers, but it's not going to solve the contradictions of capitalism. Think of the amount of imperialism that would be required to steadily increase the gold reserves.

[R_P_A_S]

Gold depletion makes the gold standard unfavourable. If we were to go to a 100% backed by gold dollar, then the government would go bankrupt. Not to mention it would lead to deflation, a low interests rate and higher rate of profit for the capitalists. This means higher unemployment for the workers. The central bank would have to constantly hoard gold.. Even if we did end the fed, which would consequently reduce the amount of inflation caused by the currency entering through the major banks.. It's not going to solve the contradictions of capitalism.

I'm sorry.. I know Im probably coming off as a real idiot.. but can you elaborate more on..

If we were to go to a 100% backed by gold dollar, then the government would go bankrupt.???

higher unemployment for the workers.

[#FF0000]

I've heard that "getting back to the gold standard" It's not possible now days. Is this true?

The GDP of the United States is about $15 trillion.

The US's total gold holdings (in dollar amount) is in, maybe, the hundreds of billions. I'll be generous and say it's a trillion (it is far, far less).

Basically switching to the gold standard would be the apocalypse.

But hey, give this a read-through, it's pretty helpful. (http://www.istockanalyst.com/finance/story/5564645/why-a-gold-standard-is-a-bad-idea-ii)

[The Jay]

In my opinion getting rid of the FED would make Capitalism harsher by getting rid of one of the few methods that the state has to buffer boom-bust cycles. There would be advantages to that but it would lead to more suffering I think, despite the damage the FED does already.

[#FF0000]

Yeah. We'd see more market 'adjustments' and we'd, as workers, feel every single one of them good and hard.

[NewLeft]

I'm sorry.. I know Im probably coming off as a real idiot.. but can you elaborate more on..
No you don't, but sure I'll elaborate..

If we were to go to a 100% backed by gold dollar, then the government would go bankrupt.???
Yes, the government would be forced to balance its budget. It would not be able to inflate its way out of debt or change the interest rate.

higher unemployment for the workers.
As the dollar deflates, money-capitalist are going to hoard as much gold, increasing the risk. In order to counter this, the interests rates have to be lowered leading to what is known in bourgeois economics as a "liquidity trap." In order to get out of this crisis, unemployment has to rise to get rid of the excess.

[Workers-Control-Over-Prod]

I've heard that "getting back to the gold standard" It's not possible now days. Is this true?

There is a reason why the US went away from Gold backing up its currency. In the 1970's, the United States had inflation of the Dollar because of the oil crisis, but the production of the commodity Gold was lagging behind that paper money production and so capitalists got nervous if the US would have enough Gold to secure their assets. The "Gold" standard of money is merely a commodity that theoretically is available around the world, but here is the thing: the US is not the leading Gold producer, South Africa and the USSR were in the 1970's and that was the reason why the US stopped securing its Dollars (to small buyers) with Gold. The Gold Standard would lead to the same deflationary encagement of the US dollar because you simply do not have the capability to produce enough of the stuff once you need to print more paper money Dollars (which will happen soon; inflation). The reason why the Federal Reserve loans out at such cheap interest rates risking inflation, is because the private capitalist economy needs that manipulation to function.

[NewLeft]

The old Bretton-Woods system had gold at a fixed priced. The United States was indebted to France who wanted to convert dollars to gold at $35 an ounce when the market value was $40.

[R_P_A_S]

In my opinion getting rid of the FED would make Capitalism harsher by getting rid of one of the few methods that the state has to buffer boom-bust cycles. There would be advantages to that but it would lead to more suffering I think, despite the damage the FED does already.

What about the whole thing that.. "states can regulate it them selves" no need for some master over lord.. aka the FED

[MuscularTophFan]

"Ending the fed" was one of Ron Paul's biggest propaganda tools for his brainwashed cultist followers.

[Workers-Control-Over-Prod]

Long Live the R3voLution! :lol:

[Tim Cornelis]

Ok, this is really a weak point for me, but the idea is that the gold standard will result in a fixed currency. Right now, the fed can print money, which can lower the value of the dollar, and results in inflation(?), or something.

Austrian economists argue that central bank artificially sets interest rates which causes economic bubbles that will collapse at some point, not that it causes inflation.

I recall Paul Cockshott citing numbers which would quite accurately predict what detrimental effects the gold standard would have, but I don't remember exactly what it was.

[¿Que?]

Austrian economists argue that central bank artificially sets interest rates which causes economic bubbles that will collapse at some point, not that it causes inflation.

I recall Paul Cockshott citing numbers which would quite accurately predict what detrimental effects the gold standard would have, but I don't remember exactly what it was.
Interesting. I will definitely google that at some point.

[Sendo]

What I find hilarious is how these Paul followers believe that gold has any more inherent value than a fiat currency. A stake or share in a productive economy is better than pieces of gold. Outside of jewelry and a few uses in the electronics industry what value does gold have? What intrinsic value does it have compared to, say, an apple or a table or a bicycle?

So they think we should use supply and demand to drive up the price of gold to replace fiat currency (if everyone did this there would be no point in national currencies....we'd have....cue horror music...a WORLD currency!)

and

we should waste human labour and resources digging gold out of the ground and storing it and guarding it. Hell, maybe have wars for oil AND for gold now. Why not switch to a diamond based currency. I'm sure Africa could do with another invasion by Western militaries.

For a while I thought Paul was an idiot, but I now see he has carved himself a niche: pot-smoking young Republicans who are disconnected from reality. His racism ranges from a laissez-faire attitude to racists in power to your typical KKK chatter depending on the audience. He is a panderer who peddles snake oil and opiates and he knows it. He is also an opportunist with no principles beyond "enrich good old boys and their ilk and keep out immigrants (excepting the Anglos and their descendants, of course)". The Republicans use him as a release valve for faux-populist pressures from below and as a great tool for bringing up red herrings. Yeah, the "fed" is why there are no jobs in America.

He presents no threat. His followers are at best regionally powerful but generally a bunch of disconnected, non-unionized, non-civic, upper middle class whites. In a country that has so many poor and is due to become mostly non-white by 2020 he is more and more irrelevant.

The man is smart enough to know why other countries don't bandy about gold! gold! gold! He knows he can appeal to that American frontier dream. The wild West. Self-made man. Two gold coins at the saloon will buy you a steak, a shave, and a room for the night. Yeeha

[Paul Cockshott]

The gold standard ties the expansion of the money of last resort to the rate of growth of the physical stock of gold. This is typically been about 0.7% to 1% a year.
The signature of capital is mcm' where m'>m. This requires an ever expanding money stock at the rate of expansion corresponding to the expansion of the embodied capital stock.
If the gold standard is retained there is a mismatch between the growth of the capital stock and that of the gold stock which leads to increasingly severe recessions in order to limit the growth of the capital stock to the rate of growth of the gold stock.

The growth of capital stock is accumulation, and accumulation is closely linked to the growth of the proletariat. Under the gold standard the growth of the proletariat becomes constrained by the growth of gold - this means chronic unemployment and increasing recessions.

Attempts are made to get round this by credit expansion, but as Marx points out in Capital III in a crisis people are unwilling to accept credit or payment by cheque, but only accept payment in gold.

Under the fiat money system, the money of last resort is issued by the state, and its growth can be accelerated at will to the needs of economic expansion.

[Die Neue Zeit]

Under the fiat money system, the money of last resort is issued by the state, and its growth can be accelerated at will to the needs of economic expansion.

I wonder why a couple of Chartalists think that fiat money already ties money to labour hours in the economy. :confused:

[DasFapital]

the gold standard works well in Zimbabwe where they literally have to pan for the stuff to buy a loaf of bread. Ron Paul is a fucking idiot.

[Tim Cornelis]

the gold standard works well in Zimbabwe where they literally have to pan for the stuff to buy a loaf of bread. Ron Paul is a fucking idiot.

Zimbabwe has no gold standard, but has considered its implementation. The inflation was, quite clearly, not the result of a gold standard. Since 2009 or so (if I remember correctly), Zimbabwe has 'abolished' their currency and now foreign currency (mainly the US dollar) is used. The country has recovered somewhat since then, and recorded 'stable' economic growth.

[freeeveryone!]

this will probably show that the federal reserve is run pretty poorly. this isn't really notable though. I don't think that anything bad or good will come from this.

[Sea]

It's a distraction, but perhaps may lead to some disillusionment.